The Trump administration announced last week that it was slashing funding for Affordable Care Act Navigators, which help people sign up for ACA coverage on the exchanges, by 90% in a move regulators say will translate into lower premiums for consumers while patient advocates say it will make it much more difficult for Americans to find the right coverage for their specific healthcare needs.
Congress created the Navigator grant program to provide consumers with “fair and impartial information and services” related to ACA marketplace coverage.
The Centers for Medicare and Medicaid Services (CMS) on Feb. 14 announced health insurance Navigators will receive just $10 million per year over the next four years, after receiving $98 million in 2024 (and $100 million had been budgeted for 2025 under the Biden administration. Last year, the Biden administration announced up to $500 million in funding for Navigators over 5 years.
A CMS press release said the savings from this newly announced reduction “will allow the Federally-facilitated Exchanges (FFEs) to focus on more effective strategies that improve Exchange outcomes and to reduce the user fee in future years, which would translate into a reduction in premium. This change will directly benefit people enrolled without subsidies who pay the full premium for their health insurance. In addition, lower premiums will reduce the burden on hardworking American taxpayers who fund the premium subsidies through the FFEs.”
Despite receiving $98 million in the 2024 plan year, the CMS release said Navigators only enrolled 92,000 consumers—just 0.6% of plan selections through the FFEs during the open enrollment period—at a cost of $1,061 per enrollment. Additionally, the average cost per enrollment exceeded $3,000 for 12 of the 56 Navigator grantee organizations.
Looking back at the grant period covering the 2019 plan year—the year before the COVID-19 pandemic under a similar regulatory approach—CMS said Navigators likewise enrolled 0.6% of total enrollments through the FFEs at a substantially lower cost of $10 million. “This previous grant funding level reflects a far more efficient $211 per enrollment,” the release said.
The Navigator program is funded by user fees, and the decrease in funding to $10 million per year will save a total of $360 million over the next 4 years of the 5-year period of performance, which began Aug. 27, 2024, and runs through Aug. 26, 2029. Because the user fee is directly passed through to the premium that health insurers charge, CMS said the savings from the Navigator program supports lower premiums for consumers in the individual health insurance market.
“People who do not qualify for federal premium subsidies will directly benefit from lower premiums. Lower premiums will also translate to less federal spending on premium subsidies,” the release said.
This change is for Navigators in the states with FFEs in the next grant period for plan year 2026. States operating state-based exchanges and state-based exchanges operating on the federal platform are responsible for determining the funding available for Navigator programs in their states.
Overall, CMS said navigator performance data shows that the current level of funding does not represent a reasonable return on investment. “These numbers indicate that Navigators are not enrolling nearly enough people to justify the substantial amount of federal dollars previously spent on the program,” the release states. “This reduction will ensure funding is focused on meeting the statutory goals of the program more efficiently and effectively.”
Analysis from KFF’s Kaye Pestaina about the navigator program funding cuts notes that the Feb. 14 CMS announcement does not reference the 292,000 people who navigators helped enroll in Medicaid or the millions of individuals helped with post-enrollment and health insurance literary assistance.
Pestaina also noted that these cuts come as enhanced Marketplace subsidies are set to expire at the end of the year and as Congress eyes potential funding cuts to Medicaid, both of which could result in significant coverage losses.
In coordination with the Feb. 14 announcement, CMS is posting updated Navigator funding, enrollment, and service-level data for the grant periods covering the 2017 plan year to the 2024 plan year.
To view the data, visit 2024 Navigator Funding and Enrollment Data.
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